The piece introduces the notion of corporatism, from a new
book by Ed Phelps.
What means “corporatism”? It’s:

…a political philosophy in which economic activity is controlled by large
interest groups or the government. Once corporatism takes hold in a
society…people don’t adequately appreciate the contributions and the
travails of individuals who create and innovate. An economy with a
corporatist culture can copy and even outgrow others for a while…but, in the
end, it will always be left behind. Only an entrepreneurial culture can
lead.

... I don’t get it. While “entrepreneurial culture” will always be
essential, many innovations that turned out to be economically important in the
US have government fingerprints all over them. From machine tools, to
railroads, transistors, radar, lasers, computing, the internet, GPS, fracking,
biotech, nanotech—from the days of the Revolutionary War to today—the federal
government has supported innovation often well before private capital would risk
the investment (read about it
here).

Shiller’s critical, for example, of the manufacturing innovation institutes
that the White House has been both touting and setting up. He’s certainly
right to ask what it is these new creations do and why we need them...
But most manufacturers I’ve spoken to about them tells me they fill an important
niche, essentially building a path through the Death Valley between the
university lab and the factory floor. If so, that’s a classic coordination
failure in which markets have been known to underinvest. ...

To be clear, my argument is not at all that government efforts in this area
are all successful or are somehow always free of the corruption that is too
common when politics enters the fray. My points are that a) many important
innovations have involved government support somewhere along the way, and b)
while one could and should worry about waste in this area, I’ve not seen
evidence, nor does Shiller provide any, of stifling. ...

So I’d suggest we be more careful in where we point the corporatist finger.

The piece introduces the notion of corporatism, from a new
book by Ed Phelps.
What means “corporatism”? It’s:

…a political philosophy in which economic activity is controlled by large
interest groups or the government. Once corporatism takes hold in a
society…people don’t adequately appreciate the contributions and the
travails of individuals who create and innovate. An economy with a
corporatist culture can copy and even outgrow others for a while…but, in the
end, it will always be left behind. Only an entrepreneurial culture can
lead.

... I don’t get it. While “entrepreneurial culture” will always be
essential, many innovations that turned out to be economically important in the
US have government fingerprints all over them. From machine tools, to
railroads, transistors, radar, lasers, computing, the internet, GPS, fracking,
biotech, nanotech—from the days of the Revolutionary War to today—the federal
government has supported innovation often well before private capital would risk
the investment (read about it
here).

Shiller’s critical, for example, of the manufacturing innovation institutes
that the White House has been both touting and setting up. He’s certainly
right to ask what it is these new creations do and why we need them...
But most manufacturers I’ve spoken to about them tells me they fill an important
niche, essentially building a path through the Death Valley between the
university lab and the factory floor. If so, that’s a classic coordination
failure in which markets have been known to underinvest. ...

To be clear, my argument is not at all that government efforts in this area
are all successful or are somehow always free of the corruption that is too
common when politics enters the fray. My points are that a) many important
innovations have involved government support somewhere along the way, and b)
while one could and should worry about waste in this area, I’ve not seen
evidence, nor does Shiller provide any, of stifling. ...

So I’d suggest we be more careful in where we point the corporatist finger.